Spirit

Hi Garth. I know being gay is neither here nor there but it has had an impact on my life. My parents and extended family have disowned me, as such I have had no mentors or elders to help me navigate with anything in my life. All that I have done or have has all been trial and error. I am in my thirties, self employed, rent, drive a 20 year old car and have no debt. My entire working life I have worked 2-3 jobs at a time and managed to squirrel away some money. I have about $5200 in TFSA, $4100 in an RRSP account and $20,000 in a savings account. After paying my monthly expenses I have about $200 to spare. I’ve been self employed full time since 2008. I used to work for an international relief agency until then but lost my job because of the financial crash. The investment donations that used to support our office dried up, our office was closed and I took the scary plunge into full time self employment.

I am in the events industry and organize everything from weddings to corporate launches. Summer is always good for work but come fall things start to slow down and I get scared and stressed out. Even though my business has done well for the last 8 years I still get scared. I would love to have a child but I don’t see how I could do that financially and this has to be the hardest choice I have made. It makes me sad but I am a realist and am ok with my choice. Well, ok as I can be. I can do without fancy things, houses and cars but I hate the stress of feeling poor and living my life to survive only.

Is there a way for me to better invest the money that I have? Where do I get more info on the on-line discount brokerage account you talked about? Will I need to hire a professional to know how to achieve 7%?

I’ve learned more from your blog than I have ever learned in any class. Your blog has been a surrogate mentor and I really thank you for that.

It’s a tough time, Julia. Being afraid on some days is the right way to feel. It keeps you human. Many of the world’s best leaders have said they often woke up in a cold sweat or felt simple terror in dealing with their circumstances. Without fearing things, we don’t act to change them.

For too many folks in their thirties, this is a bleak period. Their working lives are launched in student debt, then they’re catapulted into a society where degrees are demanded but not valued, competition for jobs is insane and imperfect parents demand perfection. The pressure to get a new house, new car, new partner or new baby is relentless, and yet the economics of it suck.

What does it matter how ‘affordable’ mortgages are when house prices are out of reach? When the bank will lend you so much money you’ll still be paying it back in a quarter century? When employers are too cheap to give pensions? When interest rates can only go up? When an MBA gets you an interview for a commissio-only sales job? When success is measured in granite, stainless and debt? When the disparity between the well-off and the struggling has rarely been so acute?

It’s easy to understand how the Occupy movement sprang to life, and puzzling to know why it failed. The middle class is being gutted from within, by these societal pressures to consume, and from without by uncertainty and cutbacks. For the first time on record, the 40% in the middle now receive just 20% of the income. And yet Mercedes sales in Canada have never been more robust, while our banks earned $8.2 billion in the last 90-day period.

So, Julia, if there is solace in knowing you are not alone, take it. Simply being self-employed, able to survive on your own smarts and guts, puts you in a unique class. Not being indebted is another huge positive, along with actually having some money stashed away. I’ve said often on this blog how many people I meet who have a life full of stuff, but no money and enough debt to bury them. They have the trappings and pretense of success, yet are living failed lives. Is it any wonder the main cause of relationship breakdown is not the absence of love, but the lack of money?

Go back a couple of posts and read my advice to Ben. Get the money out of the savings account and top up your TFSA, investing it in the mix I described. No, do not look for an advisor because you lack the funds to attract anything other than a mutual fund salesguy masquerading as a human being. Google online brokerages like Waterhouse, iTrade, InvestorLine or Questrade. Call and talk to a rep. Ask people on this blog for tips and suggestions (but not the metal nuts). And you can always reach me.

Once you have the outline of a plan, stick to it. Invest your $200 every month. Remember, a TFSA topped up to $20,000 and then fed two hundred a month averaging 7% will be worth $276,000 by the time you’re sixty.

You are not poor. You’re not living only to survive. Out of nothing you’ve created a job, giving you what so many around you lack – independence, autonomy and freedom. Others take their identity from fickle, capricious and uncaring employers. You have crafted your own. And it is all the more impressive that you did this, growing up with bigots.

Lovely post and good luck Julia! If it’s any consolation, by mastering the art of self-employment, you’ll be ahead of the curve as many more people are forced into this situation. Only some will be able to manage its unique demands. Stay flexible and enjoy your customers.

I guess I’ll let others take the “furst” position more often. I know I know, many will miss my early bon mots, little vignettes, and general joie de vivre ;-) (god, the French have such a beautiful language don’t they? – but just try sharing a country with them!)

Julia, like #11 I agree that Scotia iTrade may be a good choice because of their no-fee ETFs. This means you can buy shares without commission.

For some thoughts on creating a portfolio, you can check out Canadian Couch Potato portfolios but you might have to substitute some of the names there with equivalents that are free to trade on iTrade: http://canadiancouchpotato.com/

Dont despair Julia, you are young and have a bright independent future. Sometimes parents come to the realization that they can accept their children as they are, or have no contact. It might take years but most end up accepting instead of no contact, your family might just heal. In the meantime dont be jealous of all the spoiled kids, they become spoiled adults and often not happy.
For what its worth Calgary has a lot more open minded people than in the past, times are a changing.

On the kid thing, its always tough to have a kid when faced with uncertainty. However, it seems that it is not an impossible desire. I know a lot of young people that get married in the 20’s, with a ton of student debt and mortgage and still have a kid.

Will it be financially tough to have a kid? Absolutely. Can you survive? Most likely (and you’re off to a better start than a lot of young parents).
Is it worth it? That is entirely up to you.

Occupy failed because it had no leader and no strong negotiating position. Just an ideal which is not compatible with ever greater corporate profit expectations. Maybe you can start a blog to convince the 1% to Occupy, then we’ll get somewhere.

I do up a net worth statement every January ( assets – liabilities = net worth ). It’s our scorecard. Sounds like you are moving in the right direction Julia, and writing it down year after year would show you how well you’re doing. Sometimes I find the people who aren’t worried are the ones who should be. Feel good about what you’ve saved so far and self-employed to boot!

I’ve enjoyed these last few posts Garth. There are many good people that need direction and have few places to turn.

I would avoid itrade like the plague — since scotia bank bought them, they have been ratcheting up the fees, including wanting to charge $100/month for a TFSA with less than a $15,000 balance. I know all the banks charge these fees, but itrade used to be an independent online trading company, that only made you pay when you did transactions (and yes, itrade/scotia also charges more for those)…

As for Julia, sorry to hear how tough it has been for you — I am one of the lucky ones, came out to my (catholic) family and have had nothing but support and love, same as my straight siblings.

Hopefully you will meet a nice girl one day, and your combined resources will make having a family possible (that’s how almost all straight people swing it). All the best to you! ;-)

“I’ve been self employed full time since 2008. I used to work for an international relief agency until then but lost my job because of the financial crash. The investment donations that used to support our office dried up, our office was closed and I took the scary plunge into full time self employment.”
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There’s a challenge with “2008”. Over and over it’s presented as “the financial crisis”. Guess what. The “financial crisis” wasn’t allowed to happen. What happened instead of a correction was what we are all aware of now: Bank cartel mergers with governments cemented by huge citizen-backed bail outs. Massive money printing, and re-positioning for the biggest wealth transfer in the history of mankind.

Now 2008 is ready to happen…perhaps muted and morphed in a different way. But not enough to prop up the old paradigm.

The other headfake here is about psuedo-tolerance. By denying the many issues and real problems a lesbian woman will have to face as a result of being gay, she is de-humanized. Imagine pretending that “having a child” is some kind of “personal right” without regard for the overwhelming challenges the child would have to face. Hiding behind the fake “bigot” label is as false as the “doomer” label for calling BS on 2008.

When the comfort and “rights” of the individual are built on what something “should” be to the detriment of a child, you can imagine where it’s all going. How we do anything is how we do everything.

Too many de-humanizing concepts and head in the sand. The dignity of the human being should be first and foremost. Lying, denying and labelling are discriminatory. A gay person should not be thought less of or valued less than any other person.

“Bigotry and doomer” doesn’t cover this woman’s reality. Talk to the child she “has”…. when she-he is 18…about her experience. Maybe council her on “investment” advice
( the 2008 financial crisis vibe)….and see how it all goes over.

I assure you it wouldn’t mean much. But who cares about her …right? Never mind. This comment would have to come from the mind of a twisted bigot and a misguided doomer.

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Accusations of fraud and malpractice in the (Aussie) banking sector are growing.

Last month we exposed evidence of banks using deceptive practices with so-called low doc loans.

Now the bank known as “The Millionaires Factory”, Macquarie Bank, is accused of encouraging the use of rubbery figures in loan applications.

Tonight an industry whistleblower tells 7.30 it’s commonplace for bankers and brokers to fabricate income, assets and property valuations to get loans across the line, but when those loans fall through, it’s the borrowers who lose everything.

She’s got guts. Obviously organized, has made the most of little. Been there. Only thing I can add is when you have time, get credentials. I agree with Garth, paper is demanded but not necessarily respected. But it is possible to choose courses that help make you employable. Head offices of big employers often have people on staff who do events, or they hire people to manage big events. Not paper for papers sake but paper for expanding competence and broadening opportunity. Community colleges are better for t his than universities.

totally agree on the credentials thing — does not necessarily really change your potential value add, but will get your resume more attention, and you more interviews; credentials open doors, in my experience… after that, it is up to you! ;-)

This may seem like a stretch, but I see a lot of parallels between these stats and the residential mortgage market. These “quasi-universities” set the bar much lower for applicants, yet the loans are handed out to these students with the same frequency as loans for students of more respected schools. In other words, the quality of the asset being ‘purchased’ with the loan (in this case, the degree) and the overall market for this asset (i.e. the job market for the skills being bought) are not considered in the loan process.

hmmm… lowering lending standards and ignoring the inflated value of easy-to-acquire assets – where have I heard that one before?

This student loan bubble in the U.S. is going to trigger a mini-financial crisis of its own.

Audio: William White, chairman of the economic development and review committee at the Organization for Economic Cooperation and Development in Paris, discusses his paper written for the Federal Reserve Bank of Dallas’s global and monetary policy institute, titled “Ultra Easy Monetary Policy and the Law of Unintended Consequences.”

His paper was the big talk at last week’s Jackson Hole meeting. Read it or listen to the interview.

http://canadiancouchpotato.com/model-portfolios/
Either do Global Couch Potato Option 1 with Questrade or Global Couch Potato Option 2 with TD Waterhouse. If you want to get fancy do Complete Couch Potato with Questrade. But really any of them will get you to the same place in 20-30 years.

TFSA exists only to boost bank reserves, as the Cdn banks are as much exposed to the global banking crisis we are currently in as the banks in other developed nations. TFSA was launched shortly after the GFC in 2008. Open your eyes people……

Don’t think for a minute the banks and Cdn gov’t set up this TFSA kitty to further your financial well being. What they really did was launched TFSA to shore up bank reserves, as they knew that naturally the ignorant sheeple will instantly fall for it and willingly park their cash in the bank, thereby making the balance sheet for that bank better. Remember the “sound Cdn banks” speal we heard over and over again? Do you really think in this global climate that Cdn banks are not exposed to the EU? Or to the US?

Governments around the world need people to stay in, and operate with, their currency. They don’t want you buying real assets, like gold. The future is electronic currency, thereby monitoring and taxing every transaction. Take a look at Bitcoin.

So listen to Garth if you wish to park your cash in an insolvent bank. I personally wouldn’t. The banks don’t care about your financial well being – hope some of you can see what’s actually taking place.

Sat in a bank meeting today with my daughter to open up a TFSA @ TD waterhouse. Part Time waitressing while in University , she managed to save up $ 5,000 to put in TFSA on Garths advice. TNL@TB insists she should be buying RRSP s. High pressure sales pitch until Dad steps in and stops it. How many people get sucked into this? What advantage is $ 5000 RRSP while making $ 7,500.00 YEAR? No commission for bank lady?WTF? Not the way we should be educating our young

I would caution investing $200 every month as the fees would eat away gains pretty quick. Even questrade’s $5 trading fee on $200 works out to be 2.5%. My advice would be to contribute $200 to a cash account on say questrade and every time it hits $1000, invest then.

Precisely! The vehicle is solely intended for accounting gimmickery and shoring up their own balance sheet. Nowhere did I say it was a product. Where the mixup between us is, I suspect, is that you maintain that the TFSA is for the benefit of Joe Q Public, whereas I maintain the TFSA was setup solely for the benefit of the banks: To shore up balance sheets and provide liquidity during the GFC.

“You’re richer than you think, as long as you park your money in our institution and let it sit there” is the message of the TFSA. Remember, bank deposits are ASSETS for that bank, and fractional reserve lending allows more leverage for the big banks when more people let their hard earned cash rot within them.

Think like a banker, and you’ll see very clearly how the system is completely one sided, NOT in your favor.

Sat in a bank meeting today with my daughter to open up a TFSA @ TD waterhouse. Part Time waitressing while in University , she managed to save up $ 5,000 to put in TFSA on Garths advice. TNL@TB insists she should be buying RRSP s. High pressure sales pitch until Dad steps in and stops it. How many people get sucked into this? What advantage is $ 5000 RRSP while making $ 7,500.00 YEAR? No commission for bank lady?WTF? Not the way we should be educating our young

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Similar story on my end. When I went into my branch to setup an RESP account, I asked for it to be self-directed through Waterhouse (my registered and non-registered also sit there). After I made the request, TNL@TB looked at me entirely confused and started going through paperwork and brochures to make sense of what I thought was a simple request.

Well it sorted itself out, but she later conceded that in her many years working in the branch and setting up RESP accounts, she had ZERO requests from clients for setup of a self-directed.

Sadly, most people go right for the sales pitches on the mutual funds or GICs…

If you hold an RESP account with Scotia iTRADE, you need to have $15,000 or greater in combined assets with Scotia iTRADE to avoid a $25 annual fee (plus HST) charged to your RESP account(s) on September 15th.

For registered accounts, other than RESP accounts, you need to have $25,000 or greater in combined assets with Scotia iTRADE to avoid a $100 annual fee (plus HST) charged to your registered account(s) on September 15th.

#46 viTRifY13 on 09.12.12 at 11:02 pm
I would caution investing $200 every month as the fees would eat away gains pretty quick. Even questrade’s $5 trading fee on $200 works out to be 2.5%. My advice would be to contribute $200 to a cash account on say questrade and every time it hits $1000, invest then.

$1000 is not necessarily the magic number.

What you probably want to do is save cash until you have enough to order a block of 100 units of whatever is a value buy. This might be $1400, or it might be $2200.

Julia, you’re half way there, by knowing what don’t know and not being afraid to ask and learn! That’s one of the most important ingredients for reaching any goals you set.
The other key ingredient, is not giving up before you reach your goal out of discouragement.

I highly recommend you pick up (you can order through your library) copies of these two books:

“The Wealthy Barber Returns” by David Chilton
and
“It’s Your Money” a financial book geared to women by Gail Vaz Oxlade.

They’re an excellent foundation for building a sense of confidence in your financial knowledge. Good luck!

I was just at the CIBC to set up a self directed rrsp, tfsa account and the investment agent told me she had only done one self directed application in the three years she’s worked there.
Makes you wonder if they don’t want you having them!

I’m going to be a contrarian; and suggest that Julia use her money to buy a nice car and a nice pair of clothes.

Think of it as an “investment” in her business. The fact of the matter is in today’s age; image is everything and skills mean nothing. Julia must look the part; Julia must look super successful even though she’s currently not in this position. . .

Julia is a self-employed event planner. Who utilizes these services? Most often people with money. Now, do people with money prefer to seek the advice of someone driving a KIA or a Mercedes? The fact of the matter is if Julia wants business from these rich benefactors she must look, act, talk, etc. like a rich person.

This is the first rule of sales – look rich. Second rule is fake it until you make it. Third rule is to say what they want to hear. Fourth rule is to mirror body language (higher income people “walk” a certain way).

Anyways, many rules, overall capitalism is disgusting. Last rule is to find a way to get good health insurance, because once you’re through selling to the obscenely rich and spoiled, you may end up getting an ulcer and other associated ailments (such as vomiting repeatedly).

I’ve had a really great experience with Questrade, they are very helpful and typically respond to my email inquiries within a day or so. They have one of the lowest transaction fees for buying/selling stocks etc. And if you have over $5000 invested they do not charge an inactivity/account maintenance fee.

And good call on the kids front, they are super expensive, you really have to be in a position of giving up all your earnings to support them (crib, car seat, stroller, swing(s), diapers, diaper rash cream, receiving blankets, clothing, toys, books, bottles, soothers, food, birth certificate registration costs, extracurricular costs etc.–for example, we’ve spent $300 just to put decent winter boots, rain boots and shoes on our 2 yr old since he began to walk). Yes you can get all these items 2nd hand but it still adds up.

Not my reply but a copy and paste from one of today’s replies about the possibility of QE3 today.

Watching as investors keep pushing this Bear market into the Bulls lap. The Bulls are running with it, but have no idea why or where they are headed. The skin on the balloon of this over inflated market is way past the danger zone. One small touch and “POP”! Add to this that Wall St Bulls are snorting and screaming for QE3. Why? If QE1 & QE2 did not do the trick for ya, why on earth ask for more of what obviously does not work?
This over inflated market and those caught up in the fairy dust fantasy that is now in front of you is a carbon copy of the same fantasy that was cast upon the investors in the real estate crash of 2007. So many led to believe that housing had no end in site, that prices would only continue to rise, even Benny said in 2005 that there was no chance the real estate market had any reason to take a nose dive and yet it did just that.
Now even worse is an out of touch stock market, dragging more sideline investors in everyday. This is the time to get out, but only if you don’t mind selling short and insure your profits.
Smart money will be investing (quickly) into shorts. SKF will be at an all time high very soon.

My reply for the ultra conservative short XIV one month before the U.S. election day.

I looked at the brokerages awhile ago for my TFSA, and chose Qtrade. The least expensive of the discount brokerages except for Quest, but there was just too much bad press about Quest’s technical problems and customer lack-of-service. Maybe they’ve sorted all that out, but I decided to go with a proven brokerage. Good luck!

Julia, first off – congratulations on achieving success in your own business. That takes some kind of hard work and diligence. Second off – make sure you save your $200 spare money each month. No amount is too small. You have done a great job saving so far. When I first graduated from university and for the first few years of my marriage I can remember having only $20 each month to invest. I invested it. Today, some thirty years later, I have an investment portfolio in the seven figures (excluding RE). You can get there too.

One blog site that I have found to be very helpful (and was recommended by a reader on this site) is Mrmoneymustache. A great site on how to live frugally. I recommend that you read, read, read.
Learn about investing, read about the markets both international, US and domestic. Zerohedge is a good site for covering the international/US economy (although they have a bearish slant). Canadiancouchpotato is another good site (also recommended by others on this blog). Always make sure you understand exactly what you are investing your money in. Trust no one with your money (okay, maybe you can trust Garth).

And finally, you sound like a woman with her head on straight. Who cares what anyone else thinks about your choices in life.

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“I’ve learned more from your blog than I have ever learned in any class.” — Same here. Good on you, Julia!

“For too many folks in their thirties, this is a bleak period.” — ‘Sright, because of parental and societal pressures / obligations, they have unwittingly become serfs. Well, screw society and stuff the establishment. They are a pair of know-it-all jackasses, who know an awful lot about nothing.

“It’s easy to understand how the Occupy movement sprang to life, and puzzling to know why it failed.” — Soros / Obomba quietly introduced a police state in the US. The Occupy movement didn’t fail, they had their brains beaten out of them.

Follow Garth’s advice and read the post about Ben here.
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#28 John — “The “financial crisis” wasn’t allowed to happen.” — It’s becoming increasingly clear that 2008 was a pre-cursor to what will unfold, and these are events which are beyond us.

See first link re: EU officials suggesting countries give up control of their banks to the EZone / IMF, etc., essentially stripping their ‘sovereignty’ away. One could always view this as a start for a one world govt.

China – Russia – Iran and a host of other countries. Ditching the US Petrodollar for a new gold-backed Chinese currency? That’s what Iraq was dismembered for — it was about to set up shop with the Euro, and dubya’s backers wouldn’t allow that.

#50 – Terry – Wow, are you way off base. If the TFSA is solely for the benefit of the banks, why is mine up 62% as of today and all tax free….you need to educate yourself on ways to invest in your TFSA laddie. This is one of the best investment vehicles that has come our way and especially for those in the lower income brackets and who receive the OAS and GIS. RRSP’s on the other hand, are a tax traps for most people.

I have an account at iTrade, TD Waterhouse, BMO Investorline (wife’s, actually), one previously at SMDI, and a friend who worked for Questrade. For my druthers, I prefer iTrade. Most of them offer an online “simulator” to play with before signing-up.

Could debate exact asset selection for days, but most important probably 1) to just have a plan and follow it consistently, rain or shine, and 2) balance between asset classes (eg, a preferred share etf, a common stock etf, possibly a bond one, etc). Don’t go nuts with diversifying across every asset class known to mankind; diminishing returns kicks-in very quickly and you get nothing more than confusion.

If you’re still worried, you could post your planned asset allocation here, or one of a few other credible Canadian forums (investment options are country specific, so don’t look to an American site for which assets to buy).

I was wondering if you could do a post on how REITs finance themselves. Here is an article on mREITs from the Stateshttp://soberlook.com/2012/09/mortgage-reits-leverage-poses.html
the issue with these particular REITs is the way they use short-term repo lines. More to the point about the Canadian REITs, what is their leverage status and could rise in interest rates spell trouble? I think that by now we all here understand a little about how they buy cash-flow properties and pass through rents as dividends – at least that is my understanding. How do they finance these deals? Are these properties cash flowing due to the credit bubble dynamic and as economic activity decelerates, properties of all kinds go unrented, what about cash flow then? Any tutorial on this topic would be really helpful, given that you do love these investments. Thank you!

It looks to me like the metal nuts are about to be correct for 12 years in a row. It puzzles me how people keep pushing a “diversified portfolio” in globally correlated markets 80% traded by super computers (not humans). How did your diversified portfolio do in 2008 when all hell broke loose? Even Buffet knows not to invest in a diversified portfolio, it’s about asngood advice as buy and hold.

A video uploaded to YouTube on Thursday shows New York City police officers beating up a crowd of Occupy Wall Street protesters Wednesday night.

It begins with one police officer telling another, earlier in the day, “My little nightstick is going to get a workout tonight” — presumably referring to his baton — and both officers laughing. Then it cuts to footage of several police officers standing in the middle of a crowd of protesters, who are penned in by metal barriers, and hitting a number of the protesters with their

The Occupy Wall Street protests have been going on for almost three weeks now, and the police response has been mixed.

For the most part, the police have not tried to confront the protesters camped out in Zuccotti Park in Lower Manhattan, but they have made hundreds of arrests when protesters left the park to demonstrate elsewhere. A number of protesters were pepper-sprayed on a march from the Financial District toward Union Square late last month, and last Saturday, the police arrested hundreds of people for blocking traffic on the Brooklyn Bridge.

The biggest outcry has come from the use of physical force on several occasions. In particular, NYPD Deputy Inspector Anthony Bologna has come under fire for two videos in which he is seen pepper-spraying protesters with no apparent provocation.

Paul Browne, the chief spokesman for the NYPD, has defended the use of pepper spray against the Occupy Wall Street protesters, saying it has been “used sparingly.”

NYPD officers are authorized to use pepper spray if they “reasonably believe it is necessary to effect an arrest of a resisting suspect,” according to the department’s patrol guide. They are not, however, authorized to do so “in situations that do not require the use of physical force.”

Every time force has been used against the Occupy Wall Street protesters, it has sparked vocal backlash. On another YouTube video of the beatings Wednesday night, the poster wrote in capital letters, “This is what a police state looks like.”

I knew one of the main drivers of the Occupy Movement in NYC and she said that it fialed for lack of leadership. No-one to give a daily sound bite to the media. Plus without a main guy they spent every morning discussing their next steps and ended up at lunch with no progress. It was an ideal and not a movement really.

Congrats on having the balls to make your own income. It takes guts and grit to get up in the morning and do your own thing. people with this quality seldom fail in life…..getting rid of dead wood and toxic trash …including family members who have a history of being dipwads….bang on…….the Buddha said “If you meet someone on the road who is not your better or your equal, leave them…you have no time for fools”.

Stick to your instincts J..you don’t need financial advice…it’s lonely sometimes being right in a sea of dullards….that’s what your feeling now….stick to your gut feeling and don’t forget to be a pirate……get out their and grab what you know belongs to you….be brave….never fear. Success is a numbers game..the more times you knock on the door the closer you are to success.

30 years is too long to wait for a pittance of deflated returns that will be taxed away at rapidly escalting demands from the publlic service ghouls. I suggest going to the library today after work and hunkering down in the financial section till closing time.

Must reads

1) Security Analysis by Benjamin Graham & David Dodd
2) Beating the Street by Peter Lynch
3) A Random Walk Down Wall Street
4) Stocks for the Long Run

These will give you an overall philosophy of how the market actually works and why some things happen on the market that seem to defy logic on Mainstreet. This is the basic nutz and bolts.

The library stocks papers like ‘The Northern Miner’ and ‘The Stock Pickers Digest’…..it’s small cap issues that have performed all other sectors of the market for the past 100 years….get to know what is happening in Canadian resources……the engine of the world of small cap stocks.

I started trading stocks in school on the hall phone between classes with my rent money…far less than you have today…..the stock market is where all the money is to be made…working is for the slow minded. Think of it as jumping into a river when most people are satisfied with a bead of sweat.

We are at a critical time in history…..and in the market…things are changing…this is exactly the wrong time to be conservative……Mainstreet doesn’t see it….we are in the beginnings of a market that all the pundits have dismissed…because it’s entirely counter intuitive to everything that has and is being bandied around by the press. The news has been so bad for years that people had come to believe that it will always be so…..but that is not the way the markets work.

There are two states of reality in the human experience…fear and greed..one dominates while the other retraces…like a cosmic pendulum the world is never in synch….there is no middle ground. We are beginning to see the signs of natural greed push back the fear engendered by governments for purposes of their own.

You may not understand this now…but watch…..the market is lifting off…..base metals…precious metals…energy issues…..all back in the macro.

Garth is far too conservative for someone like yourself who has the guts to take charge……..he might be right for others……but not the bold……and fortune favours the bold my dear…..go get ‘em tiger.

PS a post like today would get you tarred and feathered as a European Socialist Liberal in some quarters. Don’t you know poor people are poor fat and stupid because they’re too poor fast and stupid to change and that’s their fault! Why do you think Ryan is Rommeny’s VP

A deposit is not an asset for a bank, it is in fact a liability. Learn banking 101 before making such a nonsensical comment. Bank assets include loans (mtgs being the largest), and bank investments such as TBills and bonds etc.
JO

@ #73 metal-nut#754 on 09.13.12 at 1:32 am
It looks to me like the metal nuts are about to be correct for 12 years in a row. It puzzles me how people keep pushing a “diversified portfolio” in globally correlated markets 80% traded by super computers (not humans). How did your diversified portfolio do in 2008 when all hell broke loose? Even Buffet knows not to invest in a diversified portfolio, it’s about asngood advice as buy and hold.
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Warren Buffet is extremely diversified, and doesn’t believe in gold.

Good advice but alas, our moderator believes all mutual funds to be, I quote “soul sucking”.

Oh were it not for the evil mutual fund, all Canadians would be so better off…LOL.

I really do think there are bigger issues robbing Canadians of their financial security, than an extra 1% or so , a year in fees.
That “1% or so” is usually closer to 2% and not tax-deductible. Funds are so 1998. — Garth

I still think that a GLWB (Guaranteed Lifetime Withdrawal Benefit) plan would be perfect for Julia for at least a portion of her savings.

Here is a person who will not have a pension waiting for her at retirement and who risks outliving her assets. Why on earth wouldn’t she want to at least have a small safety net to shelter a portion of her savings ?

I realize that nowadays these types of investments are difficult to find because companies have discovered that they are losing money funding them (which is good for the people who got in when they did) but they are still around for now and if you can find one that will guarantee a book value increase of 5% annually for 15 years plus give you bump ups according to the fund’s market value every three years, and your balance will never go down (ie if the fund market value goes down, your book value does not, it remains the same as before and continues to go up the 5% every year plus market increases) then, even with the high management fees, it is worth having something like this when you are ready to retire. Plus, the payment is for life, forever, for as long as you live ! If you retire at 65 and live more than 20 years, you will actually be tapping into additional funds on top of what you will have saved since a 5% withdrawal every year will tap out any other investment after about 20 years.

In my opinion, these investment products are like a mutual fund that cannot decrease in value, but with a guaranteed 3% on top (if you figure that your 5% will be eaten away a bit by the fees) BUT with the additional security that the payment your investment will have earned you when you begin to collect (5% of what is in your account at age 65) is guaranteed for life.

Of course the big caveat here is that you should never take out what you put into such a fund. You do have the choice, but should you do so, the managers walk away with the handsome fees and you will only get what the investment is worth on the market at the time. So you will have basically bought a mutual fund with exorbitant fees .. very stupid. What you want to capitalize on is the book value of the investment which would essentially grow by a guaranteed 5% less fees (say 4% or even 3.5% depending on the fund) and by any increases in market value (realized and added to your book value every 3 years) and which would never decrease in market value (ie. the increases in market value are recognized but not the decreases). This book value would be used to calculate your 5% lifetime withdrawal benefit at retirement.

There is also the possibility of simply buying an annuity at retirement with some of the funds you have on hand at that time, but with an annuity, should you croak the day after you purchase one, all of your money is gone. At least with the GLWB, if you die early, there is still money that you can pass on to whomever. Of course if you do not have children (like myself), this is less of an issue but I do have charities and the like that I would like to leave money to when I am gone so it is still of some importance.

I see this as a way of securing retirement so that at least if your other investments tank or do not do well, especially when you happen to choose to retire, you have that insurance for a minimum return. This, plus old age security and perhaps a bit of Canada Pension (if contributing) will keep you from starving and the other investments, if they do well, are gravy on top which will allow you to live.

HHHW
Disagree. In a low-rate world, annuities are death sentences for capital. She is far better off with a disciplined approach and a diversified portfolio. — Garth

#45 Don, #52 Victor, #60 Grant why are you guys spending time creeping out people at banks with your self-directed fetishes? Just use your computer and the internet to open your accounts. You can mail or email your ID info. End of story.

Julia: I suggest that as well as looking at the web sites mentioned, borrow a book on investing 101 from the public library.

The following section reminded me of ‘John’s’ comments. It’s no longer about C, H, and F. It’s much bigger. The first thing taught in Economic 101 is: Capital is mobile.
Bye bye Auto jos. Bye bye to many white and pink collar jobs, sent to BPOs (business process outsourcers). Telus is moving most of its call centre jobs to Phillipines. Shareholders cheer.

Yet as LH pointed out, yesterday, in C01 and surrounding areas, for SFH, the TO SOLDs emails are showing 100-120% of ask price sales. How do they do it. Cheap global money. For now. C is quite irrevelant to that trend.

“It’s easy to understand how the Occupy movement sprang to life, and puzzling to know why it failed. The middle class is being gutted from within, by these societal pressures to consume, and from without by uncertainty and cutbacks. For the first time on record, the 40% in the middle now receive just 20% of the income. And yet Mercedes sales in Canada have never been more robust, while our banks earned $8.2 billion in the last 90-day period.”

I was just at the CIBC to set up a self directed rrsp, tfsa account and the investment agent told me she had only done one self directed application in the three years she’s worked there.
Makes you wonder if they don’t want you having them!

=======

Much of it is likely sheer ignorance at the branch level. Those front line staff are just not equipped with any formal knowledge (other than to sell bank instruments) and they’re certainly not being approached by members of the public who are sophisticated investors so it’s a blind-leading-the-blind scenario to a degree.

In my case, the branch made a mistake in my RESP setup so I later contacted Waterhouse directly. They were polite, knowledgeable and fixed the issue immediately. The Waterhouse rep even told me to stay away from the branch and deal directly with them if I wanted to setup or adjust anything with my accounts.

Having children can be expensive but as with anything, avoid fads – diaper genies, abundance of plastic toys, supposedly educational toys. Buy great stuff used at Once Upon A Child, particularly on their clearance days. There are many many ways to save on baby/child rearing costs. You don’t necessarily have to pay for their post secondary education – by the time they graduate from high school it will be a whole different world. You can get degrees from a reputable university on line now.

I read many financial blogs so that we can afford for me to be at home with our 3 children for now – that is my motivation – find out yours and if you are passionate about it (having a baby, retiring early, whatever, you will find yourself doing what it takes to make it happen!) I like this site, of course, Mr. Money Moustache, I subscribe to Moneysense and I read too many others to mention.

Julia, because you are estranged from your family, I think you would be happier if you found somewhere you feel you belong – a church, a group of friends, some kind of support group.

Had a typical converstaion with one of my real estate obsessed friends yesterday.

He is so afraid of a 20 or 30% drop in the financial markets.

So the guy has a couple hundred thousand in rrsp’s and I told him that a 20 or 30% drop takes you to 160k or 140k or so, big deal.

Now I explained to him that a guy like him, who has put that 200k into a million dollar house in the burbs is way more vulnerable because a 20% drop in housing prices wipes his 200k clean away from him, leaving him with an 800k mortgage and a pile of ongoing bills, is far more at risk.

Julia follows Garth’s advice, but maybe reward yourself with a nice, modest vacation, or buy something nice for yourself with some of your saved cash as a reward for your struggles and most importantly, your hard work to overcome.

Garth, you advised Julia ” No, do not look for an advisor because you lack the funds to attract anything other than a mutual fund salesguy masquerading as a human being.” How much cash/net worth should a person have aquired prior to shopping for an advisor?

Yes mutual funds take a higher cut however wouldn’t it make sense for someone with <$50k in assets making regular contributions to do so in low MER mutual funds with no transaction fee verses the $19-$29 fee for purchasing ETFs? Once their assets grow beyond $50k then consider making fewer and larger ETF purchases at the lower $9.95 rate.

You'll spend way more in transaction fees (assuming regular contributions) with ETFs then you'll gain with a 1% savings in management fees on $20k.

Props to Julia for putting away money each month. Even though it is a small amount, anything that puts you forward rather than behind should be applauded.

My only piece of advice is to take great care when that $200/month extra becomes $2,000. It is far too easy to increase one’s spending by $1,800 and usually, there isn’t much to show for it in the end.

Definition of ‘Medium Term’
An asset holding period or investment horizon that is intermediate in nature. The exact period of time that is considered medium term depends on the investor’s personal preferences, as well as on the asset class under consideration. In the fixed-income market, bonds that have a maturity period of between five to 10 years are considered to be medium-term bonds. Investopedia explains ‘Medium Term’

A day trader who seldom holds open positions overnight may consider a stock that is held for a couple of weeks as a “medium term” position, whereas a long-term investor may define medium term as a holding period of one to three years. Similarly, home owners may regard anything less than 10 years as a medium term horizon when it comes to real estate.

Financial Accelerator Mechanism
The link between the real economy and financial markets stems from firms’ need for external finance to engage in profitable investment opportunities. On the other hand, firms’ ability to borrow largely depends on the market value of their financial and tangible assets (net of their liabilities), in other words their net worth. The reason for this is the familiar story of asymmetric information. Since lenders are likely to have little information about the creditworthiness of a borrower, they often require borrowers to set forth their ability to repay, which may take the form of collateralizing their assets. Thus, a fall in asset prices that is induced by an initial shock deteriorates the balance sheets of the firms in the sense that their net worth worsens and their ability to borrow declines. Tightening financing conditions limit their investment, which in turn reduces their economic activity or output. Finally, decreased economic activity further cuts the asset prices down, which leads to a feedback cycle of falling asset prices, deteriorating balance sheets, tightening financing conditions and declining economic activity. This vicious cycle is called a financial accelerator, a financial feedback loop or a loan/credit cycle [1] [2] [3].wiki…

The principle of acceleration, namely the idea that small changes in demand can produce large changes in output

Why did the occupy movement fail? Many reasons, debate on the subject can be long and drawn. However, my opinion is that it lacked strong leadership, focus, an actual goal, and the number one reason: It could not be politicized. Coz if it could’ve, the shallow politicos would’ve been all over it.

Put it in GOLD and SILVER..forget this stupid TFSA .01 percent interest rate garbage. QE to infinity is coming and GOLD and SILVER will go up over the next few years. GARTH will tell you the same garbage, it is not money (it is) it doesn’t give interest (it stores your wealth)

#98. You should read the fine print of the scotia bank contract. There is a $50.00 charge for transferring your TFSA to another firm. I know this as fact as I was charged this. I was one of the suckers who was conned into a TFSA GIC @1% , making $5.00 P/M interest. I transferred my$5000.00 to Sentry Investments and was charged $50.00 by Scotia Bank. 10months of interest gone. These fees , at the discretion of the bank manager may be waved , but the bank refused . Needles to say I had a pretty vocal chat with the bank . Final outcome… They lost all of my accounts , $158,000 worth . I should also mention that Scotia Bank has done nothing but lose money for me over the last 6 yrs . Thank god I’m finished with them. Final advice :DON’T do business with any banks , their only out for them self and don’t give a shit about the little guy!

The TFSA recommendation is an excellent one. The mix all wrong which has already been proven for several months. See http://www.truecontrarian.com comments below:

CYCLICAL SHARES WILL CONTINUE TO OUTPERFORM (September 10, 2012): When I last updated this web site, cyclical shares were dramatically out of favor with investors. During the past year, financial advisors have been almost unanimously recommending “quality high-dividend stocks” and “defensive recession-proof companies” and “reaching for safe above-average yields”, thereby causing investors to dangerously crowd into utilities, tobacco shares, consumer staples, telecommunications companies, REITs, and similar assets which thereby mostly doubled from their July 2009 lows. At the same time, cyclical shares were popular with almost no one, causing their prices to be about the same as they had been in July 2009. This created an obvious trading opportunity: sell overvalued defensive equities and buy undervalued cyclical ones. I aggressively accumulated energy and mining shares beginning in May 2012 and continuing through last week when KOL, REMX, and SLX remained highly attractive for purchase through Wednesday, September 5, 2012.

Since then, cyclical shares have been among the top performers of all asset classes. My largest recommended holding, GDXJ, finally broke above its 200-day simple moving average, while previous laggards including KOL and REMX have been among the top winners in recent trading days. My other holdings (see “Disclosure” below) have mostly been outperforming the S&P 500 and other general equity indices.

Investors have continued to make outflows from equity mutual funds, while hedge funds remain historically underinvested in equities and other risk assets. Therefore, the uptrend for the S&P 500 and similar assets is likely to continue until we finally experience far more media optimism and net amateur inflows. One important exception is defensive shares, precisely because of their ridiculous popularity. Nearly all defensive, high-dividend equities and related assets began important downtrends in early August 2012. These are not merely corrections: such assets have probably begun major bear markets which will continue until 2015 and which will result in these assets losing roughly half or more of their total value even after adjusting for reinvested dividends.

Some hedge funds and momentum players have noticed this vital switch, and have progressively repositioned their portfolios by selling defensive equities to purchase cyclical ones. This process will likely accelerate for the next few months. The shares of commodity producers have been among the biggest percentage gainers in recent weeks, which will probably continue at least for the next several weeks. Many shares of commodity producers had slumped by half or more from their respective highs of the early months of 2011, and as a result have significant potential remaining upside. Just regaining their February-March 2012 highs will require a meaningful double-digit gain for most of them.

U.S. Treasuries and bond funds of all stripes remain irrationally popular, and will decline sharply during the next few months along with defensive high-dividend equities. With almost all investors shunning safe time deposits which pay less than one percent, there has been an incredible frenzy for yield. Like the chase for internet shares in 1999-2000 or U.S. real estate in 2005-2006, it will prove to be toxic for the many who have participated in this quest–which is highly dangerous precisely because so many others have jumped aboard the same bandwagons. By definition, any extremely popular trading concept must fail because it creates an unsustainable price distortion.

Disclosure: During the past four months I have progressively accumulated substantial long positions in funds of commodity producers near their lows. My largest positions are GDXJ, VFWPX, KOL, XME, EWZ, REMX, SLX, RERGX, RSX, VGPMX, TNRPX, TRIEX, FCG, TAN, GDX, and NLR, in that order, with by far my greatest concentration in GDXJ and with recent notable purchases of KOL, REMX, and SLX.

7% returns over the next 5 to 10 years are another figment of GTs mimagination. After the devgastating years of 2013 and 2014 are past get used to 4 to 5% returns (not adjusted for inflation).

I check guava.ca every day and, wow, it sure looks like a lot of new listings have been popping up in Toronto lately. I’ve never seen so many houses for sale in Leaside. Some appear to be priced to sell and some are priced like this is still March 2012.

@Bigrider, post #100:
His answer, ya but thats a house and longterm it will go up. My reply: isn’t that also true of equities? We saw that in the crisis of 2008-09, when equities took a big hit, but then they came right back up again. It’s also worth noting that equities typically recover from a correction faster than houses did from the correction of the early 1990’s.

A lot of regular, average normal people lately Garth. Much appreciated! Money is often the 2nd problem to tackle, not the 1st. You covered 1st part better than I could, I’ll skip to the 2nd.
Julia, TD is likely the best bank for under $50,000 (that I know) maybe transfer TSFA and RRSP to them, split 60-40, US-Canada index funds linked below. The benefit, cheap diversified growth. Move 14,000 to the TFSA from savings as we need growth (I’m 37). Make $200 deposit to TFSA using above split on the 15th of each month to ensure your rent cheque doesn’t bounce. Keep 6,000 in savings as cash flow for business. Painless, eh?

I use Questrade for my TFSA and there is a lot of great advice and tutorials available. There are even a few free investing classes you can call up and listen in on. Take everything you read/hear with a grain of salt and follow it all up with further research.

High dividend paying co’s are great, but on the flip side, where is the co drawing that revenue from? Are they using strictly earnings to pay them out, if so, that’s a plus, if they are drawing it from other sources, find out where and re-what impact that can have.

Co’s that gradually & consistently raise dividends are usually pretty good bets. You can find this info on the “investor” tabs within the Co’s websites for the most part. Don’t get sucked into paying a middleman to get that info for you as most of it is available with a little research.

Life is going to get a lot tougher if this blog is right about real estate and I believe it is. It is not reasonable to expect most people can become financially astute. In fact it would be better if people could concentrate on what they do best; i.e. be a better programmer, a better nurse or whatever occupation fits.

When housing prices only went up and pensions were of the defined benefit variety then it was possible to ignore financial planning except to buy a house and contribute to some mutual fund in your RRSP.

The world has changed but I suspect most people aren’t ready for it. I am thankful that I could just follow the straight and narrow path and still end up in a fairly good position. Young people today will have to be a lot more astute than that and I have my doubts.

1) I am enjoying these posts for people who have less to invest. Thanks Garth. (Were you perhaps surprised by the demographic that showed up to your recent event?)

2) Julia, odd as it may sound, #61 DonDWest on 09.13.12 at 12:27 am has a point. My husband has a friend who is a contractor. When he replaced his previous car with an older model Mercedes – and I mean 15 years old, but *clean*, well-kept – he found that clients accepted higher rates. They probably think, well he must be good if he can afford that car.

You don’t necessarily need to buy the car, depending on your schedule, if you have a lot of meetings, lease and write off as a business expense, or possibly rent, if you only have face-to-face meetings a couple of times a week.

Julia, Gay or Straight, God loves you. You are loveable and you are worthy. Find a support group that accepts you, there is no reason for rejection just because you believe something different than your straight laced parents.

Look up the Couch Potato Portfolio, I book marked it from here a couple of posts back. It has some good advice on a distribution method for a balanced portfolio that will achieve 6-10% over the long term.

The U.S. Fed will buy $40 B tarnished assets mortgage-backed securities a month for as long as it takes to stimulate the economy and reduce unemployment . And all is well with the world and the markets take off.

Finally, we have politicians who are willing to stand behind the flag and not allow Canadian citizenship to be thought of as an embarrassment and something not to be proud of.

People escape from crapholes like China and Iran for a reason…finally we have a government that thinks being Canadian is a good thing. Under the Liberal Party Canada was just a bolt hole for people who the Liberals assumed were only here to continue the cultural , religious and political history of the countries they had run from. Enforced multi-culturalism as idealized by the Liberals hered ethnics into ghetto’s where they were disincentivized to become Canadian first. Bravo Mr. Baird and Mr. kenney for bringing the standard of Canadian citizenship up where it belongs. Thx for being proud Canadians and willing to stand up for our values……something unseen under decades of Liberal Party dictatorship.

The universe is unfolding as I have stated. This person needs to get invested in BPOE pronto. QE3 in full action mode, Gold soaring to new highs (opposite of what has been stated on this site). THEE GO TO PLACE FOR SECURITY is Vancouver. Prices and Sales soaring. Like Tsur says you can’t have a bubble if there never was one to begin with. People want security not the uncertainty of the stock market. This means gold and Vancouver (same thing) are solid solid LONG TERM investments. Did I mention interest rates are poised to go down. Stay tuned. The person who bought 5 years ago only has 15 years left (based on accelerated payments) til they join the Winners Circle of Owners. This is a mathematical FACT. Onward and Upward

“It makes me sick to my stomach. These people have ruined the capital markets, enslaved generations to come with mountains of debt, all just to benefit those who, if we did indeed live in a capitalist society where failure occurs based on bad decisions, would be bankrupt.

But in the end, no matter what gimmicks or market props these guys put into place, some day this whole mess will come crashing down. They’ve managed to put it off for a few years since 2008, but the day when we face systemic failure is not that far off anymore.

The reason? You cannot solve a debt problem with more debt! You cannot move toxic debt from one balance sheet to another and claim it’s gone away! A child could tell you this, but somehow 99% of the investment community won’t admit it.

The reality is that we’re now facing a Crisis that will make 2008 look like a picnic. That Crisis will come when sovereign nations begin defaulting. The most likely candidate is Spain who refuses to ask for a bailout because it doesn’t want anyone looking too closely at its books because the entire Spanish baking system is insolvent beyond belief.”

Just withdraw all the TFSA money in December after you have received your interest and deposit the money in January in a TFSA account at the new discount brokerage. Leave the original account empty and you are $50 richer.

Hey Julia, congrats on finding your way in the world. You may feel like you’re stuck, but you’re not sinking in quicksand. Take a pause and I think you’ll pick a direction soon enough.
It’s hard without a family, but the chosen family will come in time. In terms of business, one thing I’ve found most helpful to steady my cash flow is to team up with people in related fields. It helps handle deadline collisions and brings in new clients. Try meetups to network a bit and find ways to boost your off-season periods – maybe shift from weddings in summer to conferences in winter. I don’t necessarily think credentials will matter in your field – people work more by referral and your portfolio. Just be findable and that’s half the battle. Also, in terms of the cash value of homophobia, in case anyone’s wondering, my mother is leaving her million dollar home to my straight brother who has a ‘real family.’ Zip for me. And this is on top of the fancy education that got him a law degree while I landed scholarships for my B.Sc. Multiply these stories by millions and I can see it’s going to be another generation before we come out from under the weight of gay-hating histories. Ah well, at least if RE crashes, it’ll only be a half million dollar mansion…

Boom! Benny & the InkJets are putting their ball bearing on the zero key again, gold will be at new USD highs pretty quick now IMO, and silver is up 5% TODAY lol.

#117 Randman – “how do I invest in Afghanistan GDP” ?

lol, I was going to say buy US treasuries, but you don’t wanna do that.

give it up paperbugs, the chart I posted says it all, I like the way the USD$ debasement is the same as the (official) inflation over the period and just about negates all stock rises.

this should not be news to anybody, negative real interest rates drive the gold price, see 2002 article predicting the start of the decade long gold bull and why, and here we are still all this time later..

. “It’s easy to understand how the Occupy movement sprang to life, and puzzling to know why it failed.”

It failed because the next step was revolution and that takes direction and organization. These are middle class kids not devotees of Che and Marx. They’re the products of books like “No Logo” and are stunned to read how easily they have been manipulated.
Occupy movement protesters wanted jobs, four door sedans, white picket fences and wide screen colour TVs. They don’t want crushing student debt and chronic unemployment. They’re chant should have been … “We want what the Baby Boomers had’.

Numerous economist have demonstrated how the death of the middle class is linked to the rise of the Neo-cons and the decline of unions globally. Say what you will about the excesses of multinational unions … and yes, they have sometimes been their own worst enemies …. They improved their member’s living standard and gave us the secure, prosperous middle class of the 50’s, 60’s and 70’s. It all went to Hell with Ronald Reagan’s war on the unions in the 80’s. The mass firing of the US air traffic controllers was a pivotal moment in North American labour history.

Globalization was supposed to raise the the standard of living in poorer underdeveloped countries. It’s certainly done that in China, a country with 1.3 billion citizens. One billion living in poverty, 300 million in the Chinese version of the middle class. Globalization has also turned North America into the WalMart economy. Price is everything. The cheaper the better. Who cares if buying that Chinese, Korean or Mexican made lawn mower puts your neighbour in Kitchener out of work. We demand low priced widgets and employers demand low priced labour.

The triumph of the Neo-cons is how they have convinced us to make choices, both economic and political which are against out own interests. In the US, a Republican candidate for their Presidential nomination claims the educated are snobs. The tyranny of the Patriot Act is freedom. The religious right claims scientific knowledge is an attack on God. ….. didn’t we read this all somewhere before? Science fiction sometimes become reality.

The wealthy are not going to share without a fight. Just look how far the Koch brother and Sheldon Adelson are willing to go to buy a Presidency in the USA. The Citizens United decision in the US change democracy there into a commodity to be purchased. Oh, don’t think the Koch brothers have ignored Canada. The donated just under $400,000 to Canada’s version of a Conservative super PAC, The Fraser Institute.

We have a Federal Government that doesn’t believe a problem exists. The growing gap between rich and poor … it’s all kinda normal to them. The Neo-cons believe the rich are smart and hard working and the poor and middle class are just lazy. You have to look far back in our history to find such an ill informed , dogmatic group of politicians. It somewhat explains why Prime Minister Harper’s fear of Bozo Eruptions from his back benchers is so well founded. It’s amazing how many bat crap crazy things came out of their mouths when they’re permitted to speak their minds.

Harper, just like ex-Premier Charest failed to understand the growing anger in the country exemplified by the protests in Quebec. What started as a movement against rising tuition has become far more. Right now, it’s the calm before the storm. Pauline Marois has to pay up on her pact with the students in Quebec. It’s a certainty that CLASSE, the radical Marxist faction of the student unions is just chomping at the bit …. waiting for her to withdraw the increases which were already included in the student’s recent tuition bills.. Any betrayal of their support will result in an explosive backlash.

Maybe this time students in the rest of Canada will wake up. I wouldn’t count on it though. As a group, they don’t vote and act like political zombies. It’s national tragedy when our brightest are not represented in the political process. Of course, it speaks clearly to how badly our political process is flawed. With 39.7% of the votes cast, the Conservatives became virtual despots until the next election. Harper’s stacking of the Senate with Conservatives will handcuff the House of commons for the next decade since approval in both Houses is necessary for legislation to pass.

The NDP are at 38% in the latest national polls with support mostly in Ontario and Quebec. If an election were called today, that would result in a significant minority or possible majority NDP Government. It all depends on how far Liberal support collapses. In calm and boring Canada … this is a revolution.

A general note on the “Occupy” movement,
Let me shed some truth on this – this will be offensive to you politically correct, left-wing socialists so forewarned is forearmed.
The reason that this “movement” failed is because it consists of a bunch of Gen-X and Gen-Y bums, ne’er do wells, hobos, drug-addled basement dwellers and various other dregs of society who have somehow reached the conclusion that if they make a big enough spectacle of themselves the productive part of society ( ever-shrinking ) will give them free shit from cradle to grave. Not going to happen -EVER. Can’t happen.
That is what it is. Period.
You may now go back to your liberal brainwashed programming…

What you want to capitalize on is the book value of the investment which would essentially grow by a guaranteed 5% less fees (say 4% or even 3.5% depending on the fund)
———————————————————
A regular mutual fund fees is usuallly 1.5% to 2.5% or more, but a investment with a guarentee but moves with the market is less??? I doubt my parents had segregated fund the fees were at least 2% each, plus there’s the trailer fee for the salesman and the fee for the guarentee (insurance fee i think) went up almost everyother year. If your REALLY REALLY REALLY WANT a guareentee jsut keep to GIC’s but save more to make up for the fact that your not will to invest in better investments for better returns.

Occupy failed because they kept arresting everyone. Attending the event became a question of ‘do I want to go to jail?.’ Ditto with the G7 meetings. The past 10 years has seen some of the biggest protest rallies in human history with little press coverage (or quite biased coverage at the time), intense undercover infiltration frequent mass arrests and, most importantly, no end result of change. The control of the masses is in a very, firm grip.

#103 PSA on 09.13.12 at 9:31 am Garth, you advised Julia ” No, do not look for an advisor because you lack the funds to attract anything other than a mutual fund salesguy masquerading as a human being.” How much cash/net worth should a person have aquired prior to shopping for an advisor?
———————————————————-
Tried to speak with someone TD Wealth Management, they said they require a $500,000 minimum, ive decided for my parents RRSP’s to speak with a Fee only financial planner to help me build a portfolio for them.

#155 IG……by all the direct regurgitation of the CBCparty line about the scary USA you must be watching way too much TV….this is Canada…not the US…we don’t have Obama, Bush or the Koch brothers on this side of the border. I know these things are really emphasized by the leftist media…but they just aren’t relevant in Canada.

Finally…..if you refer to students as being ‘our brightest’…….you don’t have kids…have never been to university……and have way too much time to listen to the jibber jabber on the CBC.

Now what happens when you go to a tax haven to try and research a scandal?

“Leah McGrath Goodman is an American investigative journalist, author and former UK resident who began researching reports of the breakdown of the rule of law in Jersey – a British Crown Dependency and one of the world’s leading offshore tax havens.”

…Haut de la Garenne was opened in 1867 as an industrial school for “young people of the lower classes of society and neglected children”. During the second world war, occupying German forces used it as a signal station, and in 1945 it became a children’s home again. There had been rumours for decades that children were suffering sexual and physical abuse – suspicions that the island’s authorities appeared reluctant to investigate.

If he fails to instill organic aand self-sustaining economic growth, or more statistical illusions of this, his entire life’s thesis, his academic assertions on the causes of the Great Depression, and indeed the myth of the efficacy of Keynesian stimulus will be destroyed.

And he will fail. The system is propped up by can-kicking, price-fixing and pretending that assets are worth more than market prices. Yet the economy is bleeding from within, starved of real capital, regulated and governed to death and with no price discovery mechanism at all…

He’ll fail perniciously, slowly, over months and years. Not suddenly. Structural unemployment will climb. Businesses will increasingly go under. Who’s willing to invest? House prices will flounder while prices of food & energy rise. Higher education, already very expensive, will increasingly prove to be a blind alley. And so on…but what will really die is the myth of the efficacy of central planning.

Gold up $33 ~ so far! ~ thank you ChairSatan, for a nominal several thousand dollar one-day gain…

The day the U.S. joined the Eurozone to follow in Japan’s failed “unlimited” “open ended” QE. What a disgrace Bernanke is and the masses are too busy waiting to pre-order Iphones to care. That is now over half of the global GDP engaging in QE, with China not far behind. That would be the 1st, 2nd, 3rd and 4th largest economies in the world. Yet, we still see deflation or stagflation at best going forward because wages aren’t impacting positively by this policy. Yet Garth still won’t acknowledge this sinkhole of debt and money printing to paper it over isn’t an ongoing Depression. The irony is even from an equities standpoint this is going to backfire for a number of reasons, namely, since the P in P/E is going to inflate as the E in P/E is declining. Something has got to give.

Be forewarned Herr Westernman, you will probably not like the you tube video link below. Chris Hedges takes Kevin O’Leary to task for his over simplistic and insulting manner when being interviewed by O’Leary about the Occupy movement.

Heres a laugh…..consumer inflation is up…..but don’t worry….overall inflation on industrial paint and plastic keyboards form China are stable……..I understand that if one marinates their keyboard in ship side grey first the plastic tastes much better….

Who are they fooling……the money supply is causing the inflation pipe to burst….so that government can continue to borrow cheap money from itself to spend on supporting civil servants….so that food costs skyrocket and starve the elderly and the children….thats good economics?

End the insanity…spending has to stop. Cut the civil service by 50% immediatley ..claw back all pensions so that civic ghouls recieve the same as anyone on CPP. The ones who have been retired for twenty years and collecting should have to pay it all back…anything above what CPP/OAS would have paid them.

Go one better for the tax payer…since the unions have stolen a vast amount of loot at gunpoint…make them pay it back…confiscate the houses, investments and bank accounts of all civic servants in order to claw back what has been stolen from Canadians.

The economists are going to say there is no inflation…they are going to say the consumer can substitute from meat to grass seed…….tell that to the starving single moms and their grass fed children.

NDP = Communists, Socialists, Welfarerists, posers with no backbone
Liberal = Please everyone, be soft leave Canada with no real identity and no path
Green = Oh Please life is not full of flowers and dreams, grow up already
BQ = Fascists, does not deserve to be in national debates, separate already

Conservatives = Realistic Views with One Ball instead of Two, Best Choice so far, but needs improvements

Marshy @ # 168,
Not even going to watch it – it’s irrelevant what either one or both of these buffoons say. I spoke the truth and nothing but the truth about these idiots known as the “occupiers”.
You need to stop cluttering up your alleged mind with left wing drivel and see things as they really are – not as you wish them to be…

QE1,2, saw rising unemployment, stagnate RE, but some rich guys got a bit richer. QE3 will not increase house prices in the u.s. or Canada because people in both countries are completely broke. only difference is Canadians don’t know it yet. We have had low rates all year and sales have slumped regardless. 7 of 10 households own in Canada and 2 of the remaining 3 haven’t got a choice.
I have been watching 3 SFH in the 416 for over 3 months one just dropped the ask 50k and is completely empty, would love to post a link but don’t want to advertise.

Arshes #159 said “Tried to speak with someone TD Wealth Management, they said they require a $500,000 minimum, ive decided for my parents RRSP’s to speak with a Fee only financial planner to help me build a portfolio for them.”
**********************************
Garth, you provide these services do you not? I know you have never tooted your own horn on here but what do you charge on a fee only basis to manage a portfolio? If nothing else, it may provide a benchmark for others on here when they are shopping for an advisor.

The occupy movement failed as it was a bunch of white dreadlocked hipsters, and some Starbucks drinking hippies thrown in. These anti everything people, should have been rounded up and shipped to 1 of the Gulf islands that we could have gifted them, and they could have their own sustainable economy selling their scented oils, hemp sandles and bead wears.

I would have preferred to get a fire hose and spray those hippies back to the gutter they came out of.

Yes, yes, yes, we get it. All baby boomers are examples of workhorses while their offspring are all dumb and lazy. . . Some ole, same ole, tired ole right wing unproven rethoric. Could you get anymore unoriginal?

Julia,
One of the best investment strategies over many decades has been a so called Permanent Portfolio. You must divide your investmnets into four equal parts: stocks, long term bonds, cash and gold. Those asset classes respond differently to different market conditions ensuring you will never suffer large drawdowns. This strategy has been very successful over many decades.

You will need a discount brokerage account to establish it but once you have that it’s really simple.
Buy the following securities (known as ETFs) and enjoy 6-7% growth per year without significant drawdowns: SPY (your stocks), TLT (bonds), SHY (cash), GLD (gold). When one of those four components exceeds 35% of your total allocation or falls below 15% rebalance everything by selling the winners and buying the losers back to 25% each.

Metal nuts! I love it. Silver is up again today and that’s why I’m NUTS about the metal. I just LOVE it. Julia, do what you want but the metals are your best chance of doubling or tripling your net worth over the next few years. Heck even Garth advocates putting some of your net worth in metals so why not put 20% into silver now? I’m all in and can’t imagine being in any other asset class, especially with the money printing that Europe, China and the US are engaged in.

A record 22,504 properties are going up for auction next month in Wayne County because of nonpayment of taxes, further evidence of the real-estate crash whose aftershocks still reverberate. The foreclosures are up 57 percent from 14,290 last year, and officials with nonprofit agencies working to keep residents in homes say they’re bombarded with pleas for help. The vast majority of the properties, 20,040, are in Detroit.

=

For several years, Phillips has helped owners use a legal loophole to wipe away debt by buying back their properties in October when minimum prices plummet. Phillips said he expects to help 600 owners do the same this year.

The News reported more than 400 owners last fall appeared to buy back their properties for pennies on the dollar, costing the city and schools at least $4.7 million in taxes and liens.

Conservatives = Sociopaths led by a control freak, hostile towards science, history, bilingualism, rational thought and anyone who’s education didn’t come from the University of Calgary’s economics department or an unregistered Christian college. A party skilled at promoting National unity by angering everyone equally from sea to shining sea in both Official Languages.

NDP = So young, so motivated, so well meaning and so naive it’s painful to watch them self destruct. But come the next election .. self destruct they will. A party led by a civil service technocrat with all the charisma of tofu on plain yogurt. A party working feverishly to erase the whole social democratic label.

Liberal = A party in search of a leader, a purpose, a direction and a reason for existing. They lost the middle left to the NDP and handed the reins to Bob Rae, a Rhodes Scholar and a certified expert in train wrecks. They have become the political equivalent of the old man in the park who shouts at the pigeons. Irrelevant.

Greens = Economically on the right, socially on the left …. and saving the planet one Prius at a time. Their party slogan should be: “Eat a beaver – save a tree”, but it’s not. They have to keep their PETA members happy.

BQ = They have a lot in common with the dinosaurs. OK, maybe just the French speaking ones.

You said, “However, my opinion is that it lacked strong leadership, focus, an actual goal, and the number one reason: It could not be politicized.”

I disagree. I believe that it has a very clear goal – the removal of control of our society by corporations. They are very focused. However their demands cannot be met without significant changes including the ceding of control by the corporate state.

It cannot be politicized now because both US political parties are controlled by corporate money. This will have to change or more alternatives will have to emerge.

Good comment. I keep wondering if we will ever read anything intelligent from a neandercon or randroid on this blog. Westernman and Truth Hammer set the bar so low a child could raise it. Maybe they are all just illiterate and dumb like the red neck stereotype?

You’re too emotional and can’t handle the truth. The rules have changed. RE and stocks have become more valuable today after the FED announcement. And you can just keep on waiting for that “crash to zero” like you say :) … and keep posting.

Smoking Man: You are correct. Inflating our way out. People who did not get into RE years ago are screwed…not their fault…but lack of wisdom (always go with the herd on average).

Those that bought will enjoy low rates (pay off huge amount of principal) and have the remaining debt inflated away (even 20% over 5 years is enormous).

Yeah, right, wages are going up.
Everything but wages is about to inflate you fool.
Credit conditions are tightening for mortgages in Canada.
That is the death knell for Cdn RE – reduced discretionary income.
Go buy some more properties – hurry and leverage to the hilt.
You are dumb.

DonDWest @ # 181,
This may come as news to you, but my purpose in life is not entertain the likes of you with new and original material but to to cut to the core of the matter, speak truth and call left-wing, socialist, liberal bullshit for what it is.
Clear enough?
And for you Marshy, I would like to remind you that the world is full of famous, degree’d idiots that don’t know how to turn a doorknob. These occupiers are filthy, left-wing communists – I’m sorry if you are one of them – do your best to get yourself straightened out and stop defending these vermin …

Next to Garth I’m the show here, love me or hate me, I get the most Cntr + f smok

I can’t wright, make no sense at times yet people read me cause i’m interesting, creative, smart as hell and a bit of a loonie. Never wrong. 3 years of posts. 10,000 visits a month to my blog which I don’t even post to that often.

Unlike you I have fans.

You only insult people, you contribute nothing of value.

I will not respond to any of your posts going forward, why would I elevate your status by mentioning you.
You suck, you’re a bully.

He is a classless, self-promoting blowhard who had a small piece of a billion dollar deal, who, upon gaining some financial success proceeded to nurture his Napoleon Complex to a truly offensive level.

Kinda like Smoking Man, but with verifiable money and no addictions, save himself.

“Don’t you realize that with QE3 wages and more jobs will rise drasticaly.” – Smoking Man

Wages have been stagnant since the 70’s, inflation adjusted, for all but the few. This latest round of ‘easing’ will not drastically raise wages, nor will it create a jobs panacea. What it will do is inflate the markets in an artificial way, provide greater leverage for large institutions to speculate with, and force other currencies to devalue as a rule. It will also backstop reckless behaviour for those within the ‘Too big to fail’ complex.

Commodities will continue their spectacular run, and equities with exposure to tangibles will outperform.

Julia, a few thoughts …
You don’t have enough to open a discount brokerage account (yet); I’m a big fan of TD E-Series, because of the low MER (you will have MER on ETFs as well … one does have to go through a little bit of hell to open them because a mutual fund account must be opened in branch and then you go home, sign onto your computer and convert them to a self-directed e-series account. Don’t have to deposit anything when they’re opened; just set up a monthly deposit when you get home. I have my deposit automatically go into a money market fund and when enough to buy an e-series fund, switch it over.

If you honestly think you may have or adopt a child, then set up and contribute to an RRSP now … since you’re self-employed, your earnings are/may not be insurable to qualify for maternity benefits. You can get a tax break contributing to RRSP now and when you take a break to have a baby, withdrawals would be made when you have little to no income and you’d get tax back.

Otherwise, if your income is modest an RRSP is not a suitable vehicle for saving for retirement (Google ‘Richard Shillington’). Max out the TFSA and ensure any non-registered accounts hold low-tax impact assets like dividend stocks or Garth’s fav preferreds. Avoid interest income outside of tax sheltered accounts.

Read. Then read some more. You may want to start following blogs like Dividend Ninja and Canadian Couch Potato in addition to Garth. There’s a ton of info out there and everyone has a recommendation, including me, but it’s you who has to live with the decisions you make. Do what will be good for your goals, risk comfort level, and knowledge. Don’t blindly follow a suggestion without understanding if and why it is good for you.

your stated purpose in life – “to cut to the core of the matter, speak truth and call left-wing, socialist, liberal bullshit for what it is” – is laudable indeed.

Now would it be possible for you to apply the same intellectual rigour to right wing, neandercon, conservative bullshit? There is such a thing, you know, and if you need help discovering it, I’d be delighted to be of assistance.

Oops…sorry…didn’t realize I came into an Ellen/Oprah blog. Was looking for another blog I used to go to. Sorry again….please go on telling everyone how wonderful they are and can be just for being them.

Herb @ # 222,
The day that I need your assistance on anything will be the day I pack it in…
I doubt you could arrange a spontaneous campfire sing along…
Remember Comrade Herbie, Liberals like you screw things up, people like me straighten them out…

Fred on 09.13.12 at 8:04 am
#45 Don, #52 Victor, #60 Grant why are you guys spending time creeping out people at banks with your self-directed fetishes? Just use your computer and the internet to open your accounts. You can mail or email your ID info. End of story.

Julia: I suggest that as well as looking at the web sites mentioned, borrow a book on investing 101 from the public library.

Opening up a self directed account is a fetish?
Wanting to deal with a human at the bank is now creeping out?
Bet you are amazing at texting! Off you go now back to your “Call of Duty”

Thank you for the clarification on O’Leary’s net worth. Apparently he is only worth about $300 million or so …. not bad for the sale of a crappy software company that gave the purchaser (Mattel) nothing but grief. Your assessment of him is spot on.

149 Macrath
Yes you are correct . That is what I should have done. When the banks say NO FEES , you expect to be charged no fees . As for SPACEMANS comment , you should READ the comment I submitted ” Scotia bank charges no fees ”
Let me guess …. You’re one of those &$!?.!;$$ flogging off mutuals & GIC at a bank

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The views expressed are those of the author, Garth Turner, a Raymond James Financial Advisor, and not necessarily those of Raymond James Ltd. It is provided as a general source of information only and should not be considered to be personal investment advice or a solicitation to buy or sell securities. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor's circumstances and risk tolerance before making any investment decision. The information contained in this blog was obtained from sources believed to be reliable, however, we cannot represent that it is accurate or complete. Raymond James Ltd. is a member of the Canadian Investor Protection Fund.